The same day Walgreens announced its $5.2B investment in VillageMD to snag a majority stake in the growing primary care clinic, it ALSO revealed it had made a $300M investment in CareCentrix that scored 55% of that company and another opportunity to expand its reach beyond the pharmacy – this time into the home.
CareCentrix’s CEO John Driscoll takes us behind the deal, which lands Walgreens into the world of post-acute care (home nursing, hospital discharge recovery, home infusion, palliative care, etc.) which he describes as the “long-form sexy-cool” segment of the healthcare market that’s not only worth $75B annually now, but that’s also set for massive growth over the next 20 years.
Walgreens is clearly seeing the opportunity John’s seeing, particularly when it comes to positioning its pharmacies as “local health distribution and support centers” – hubs that leverage both the trust patients have in their pharmacists and the frequency with which they visit a Walgreens store compared to a doctor’s office or hospital. In the Walgreens Health strategy, what’s the vision for how CareCentrix and VillageMD will ultimately work together to take care of these regular Walgreens customers? Will post-acute care fair as well as primary care when it comes to a retail distribution channel? And, of course, we HAVE to go behind the scenes on the deal itself and ask John what we were all wondering: Why didn’t Walgreens just acquire both VillageMD and CareCentrix outright??
Leaders in hospitals and health systems as well as post-acute care providers such as skilled nursing facilities (SNFs) and Home Health Care (HHC) agencies operate in a complex environment. Currently, the health care reimbursement environment is largely dominated by fee-for-service models. However, acute and post-acute leaders must increasingly position their organizations to prepare for, and participate in, evolving value-based care programs—without losing sight of the current fee-for-service reimbursement structure.
With that said, the call to action for acute and post-acute providers working at both ends of the reimbursement spectrum is real. The time is now to innovate, test and adopt new post-acute care models to support each patient’s transition from hospital to post-acute settings, and eventually home to enable a better care experience for patients and their care teams.
This is especially relevant for Skilled Nursing Facilities (SNFs) and chains that meet the current Medicare requirements for Part A coverage. Increasingly, the SNF industry is under pressure from the Medicare program to improve coordination and outcomes. Medicare’s hospital readmission policy and value-based purchasing program (VBP), bundled payments, and ACOs encourage SNFs, and other post-acute settings, to avoid readmissions. In addition, earlier this year, the Centers for Medicare and Medicaid Services (CMS) finalized a new patient-driven payment model (PDPM) for SNFs, which will go into effect on October 1, 2019. The overhaul of the entire system will require significant staff focus and operational changes.